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Europe

Italy to reveal ‘cost of EU palaces’ in escalating budget row

© AFP

Text by FRANCE 24

Latest update : 2014-10-24

Angered by EU criticism of Italy’s proposed budget for 2015, Prime Minister Matteo Renzi has warned that his government is “going to have some fun” publishing details of the cost of European institutions.

Renzi’s comments, made on the sidelines of an EU summit in Brussels on Thursday, mark the latest twist in a mounting row over Rome’s proposed budget for 2015, which has come under fire from the EU Commission.

Earlier in the day, the Commission’s outgoing chief Jose Manuel Barroso had vehemently criticized the Italian government’s decision to publish a letter from the EU requesting clarifications on the budget.

The letter, signed by the EU's Economic Affairs Commissioner Jyrki Katainen, was marked "strictly confidential".

Slamming Rome’s "unilateral" decision, Barroso said the Commission preferred that budget talks with member states take place behind closed doors.

The Commission chief, who steps down on October 31, said his team was "in consultations" with several countries over infringement of the rules and "it's better this happen in a context of trust".

In Italy's case, the proposed budget complies with the EU’s strict deficit ceiling of 3% of GDP, but falls well short of required commitments on structural reform.

Renzi responded to Barroso’s criticism with a threat to shed light on Brussels' own spending.

"We will publish data on everything that is spent by these palaces. We're going to have some fun," he said.

Renzi also insisted that Italy’s budget posed “no problems”, underscoring Rome’s decision to adopt a hard line in talks with Brussels.

Anti-austerity front

Galvanized by mounting popular discontent against the EU, Renzi’s administration has become more vocal in its criticism of the budgetary orthodoxy preached by Brussels.

In so doing, it has lent support to France, another critic of austerity policies and a frequent violator of EU budget rules.

French officials have confirmed they also received a letter from the EU, though they do not intend to publish it.

The dialogue with Brussels continues "in very good conditions", French President François Hollande said Thursday, stressing France's commitment to EU budgetary rules but "with the maximum flexibility".

France has forecast a budget deficit of 4.3% in 2015, far above the expected 3%.

It has defiantly ruled out any further cuts to spending, claiming these would do serious harm to its fragile economy.

The Commission has until next Wednesday to decide whether Italy, France and the other recipients of the letter are in "serious" breach of EU rules.

But admonishing France and Italy, the second and third-biggest eurozone economies, and formally demanding a change to their budget would be a huge political risk.

EU officials are wary of the possible fallout in both countries, where near-zero growth and soaring unemployment are fuelling support for eurosceptic and far-right parties.

(FRANCE 24 with AFP)

Date created : 2014-10-24

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